Tenth Circuit Narrows § 1446(b)(3): “Other Paper” Must Originate in the Removed Case; Prior Jurisdictional Dismissals Preclude Re‑Litigation of Administrative Exhaustion

Introduction

This published decision from the U.S. Court of Appeals for the Tenth Circuit resolves two recurring procedural issues in class litigation and oil-and-gas royalty disputes: (1) when the 30-day removal clock under 28 U.S.C. § 1446(b)(3) starts under the Class Action Fairness Act (CAFA), and (2) whether prior state-court dismissals for failure to exhaust administrative remedies preclude plaintiffs from re-litigating exhaustion in a later-filed action.

Plaintiffs-Appellants C&M Resources, LLC and Winter Oil, LLC (Royalty Owners) brought a putative class action alleging underpayment of oil and gas royalties by Defendant-Appellee Extraction Oil & Gas, Inc. (Extraction). This suit is the third iteration of substantially the same claims in Colorado state court. The earlier two state cases were dismissed for failure to exhaust before the Colorado Oil and Gas Conservation Commission—now the Colorado Energy & Carbon Management Commission (the Commission).

In this third case, the state court stayed proceedings pending the Colorado Supreme Court’s decision in Antero Resources Corp. v. Airport Land Partners, Ltd., 526 P.3d 204 (Colo. 2023). After the stay lifted and discovery began, Extraction removed under CAFA, asserting that discovery first revealed more than $5 million in controversy. The district court denied the motion to remand and granted judgment on the pleadings for Extraction on issue-preclusion grounds. The Tenth Circuit affirmed both rulings.

Summary of the Opinion

Removal timing under § 1446(b)(3): The “other paper” that starts the 30-day removal clock must arise from and be filed in the same case that is being removed. Papers filed in other proceedings—even between the same parties—do not qualify.
Textual method: The court used noscitur a sociis to construe “other paper” by reference to its statutory neighbors—“amended pleading, motion, [and] order”—and the clause referencing “the initial pleading” of the same case, limiting “other paper” to filings within that case.
Strict notice rule: The Tenth Circuit reaffirmed that the removal clock starts only upon “clear and unequivocal notice” that the case is removable, and it is “very strict” in assessing ascertainability.
Timeliness challenge waived: Timeliness is a procedural, not jurisdictional, defect. The district court acted within its discretion to disregard Royalty Owners’ proof-of-claim argument raised for the first time in reply; the untimeliness argument was therefore waived.
No waiver by state-court litigation: A defendant waives removal by litigating in state court only after having adequate notice of removability. Extraction lacked such notice until discovery in December 2023, so there was no waiver.
Issue preclusion: Prior state-court dismissals for lack of exhaustion precluded Royalty Owners from re-litigating the exhaustion requirement, including their futility arguments, which the state court had already rejected.
Finality for appeal: A dismissal without prejudice for failure to exhaust can be a final, appealable order when the defect cannot be cured by amendment.
Appellate practice reminders: The panel denied motions to supplement the record and admonished counsel regarding Rule 28(j) candor and potential sanctions.

Analysis

I. The Removal Question Under CAFA and § 1446(b)(3)

CAFA permits removal where a class has at least 100 members, minimal diversity exists, and more than $5 million is in controversy (28 U.S.C. § 1332(d)). When a complaint does not itself reveal removability, § 1446(b)(3) allows removal within 30 days of receiving “an amended pleading, motion, order or other paper” from which removability can first be ascertained.

The court held that “other paper” refers to documents generated in, and filed in, the same case being removed. A proof of claim that Royalty Owners filed in Extraction’s Delaware bankruptcy case (valuing their claims at $30 million) did not trigger the 30-day removal clock because it was not “involved in” the removed state-court case. Likewise, a years-old case management transcript from a different earlier state case did not qualify.

Key elements of the court’s reasoning:

Text and structure: The statute’s dependent clause—“if the case stated by the initial pleading is not removable”—anchors the operative documents to “the case” at hand. The definite article “the” signifies that Congress meant the initial pleading (and any subsequent “amended pleading, motion, order or other paper”) in that very case, not in other, separate proceedings.
Noscitur a sociis: Reading “other paper” alongside “amended pleading, motion, [and] order” suggests documents typically filed in court as part of the same, ongoing litigation after the initial pleading.
Consistency with circuit authority: The decision aligns with Tenth Circuit strictness on ascertainability (Paros Properties LLC v. Colorado Casualty Insurance Co., 835 F.3d 1264 (10th Cir. 2016)) and other circuits’ interpretations that “other paper” must be “involved in” the case being removed (Berera v. Mesa Medical Group, PLLC, 779 F.3d 352 (6th Cir. 2015); Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965 (8th Cir. 2007)).

The court also endorsed two complementary removal principles:

“Clear and unequivocal notice” is required to start the removal clock (Akin v. Ashland Chemical Co., 156 F.3d 1030 (10th Cir. 1998); Paros).
Pre-suit communications and out-of-case filings are not “other paper” (Paros).

Timeliness challenge and waiver: The district court acted within its discretion to disregard the proof-of-claim argument because Royalty Owners raised it for the first time in reply (Conroy v. Vilsack, 707 F.3d 1163 (10th Cir. 2013)). The panel emphasized that timeliness is a procedural, not jurisdictional, requirement—hence waivable if not properly raised (Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996); City of Albuquerque v. Soto Enterprises, Inc., 864 F.3d 1089 (10th Cir. 2017); Paros).

No waiver by state-court litigation: A defendant waives removal only by manifesting a clear and unequivocal intent to litigate in state court after it has adequate notice of removability (Akin; Soto Enterprises). Because Extraction first ascertained the $5 million threshold through December 2023 discovery within this case, it had not waived removal by its earlier state-court participation.

II. Precedents Cited and Their Role

Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996): Distinguished jurisdictional defects from removable procedural flaws such as untimeliness.
Akin v. Ashland Chemical Co., 156 F.3d 1030 (10th Cir. 1998): Removal clock requires “clear and unequivocal notice.”
Paros Properties LLC v. Colorado Casualty Insurance Co., 835 F.3d 1264 (10th Cir. 2016): Tenth Circuit is “very strict” on ascertainability; presuit communications are not “other paper.”
Berera v. Mesa Medical Group, PLLC, 779 F.3d 352 (6th Cir. 2015); Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965 (8th Cir. 2007): “Other paper” must be involved in the case being removed.
Gustafson v. Alloyd Co., 513 U.S. 561 (1995); United States v. Gonzales, 520 U.S. 1 (1997): Textual canons (noscitur a sociis; significance of the definite article).
City of Albuquerque v. Soto Enterprises, Inc., 864 F.3d 1089 (10th Cir. 2017): Subject-matter jurisdiction vs. procedural removal requirements; timeliness is waivable.
Garley v. Sandia Corp., 236 F.3d 1200 (10th Cir. 2001): De novo review of remand denials.
Conroy v. Vilsack, 707 F.3d 1163 (10th Cir. 2013): District court discretion to disregard arguments first raised in reply.
Moya v. Schollenbarger, 465 F.3d 444 (10th Cir. 2006); Jacobs v. Salt Lake City Sch. Dist., 154 F.4th 790 (10th Cir. 2025): Finality of dismissals for failure to exhaust.
Society of Separationists v. Pleasant Grove City, 416 F.3d 1239 (10th Cir. 2005); Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138 (10th Cir. 2000): 12(c)/12(b)(6) standards.
Arizona v. California, 530 U.S. 392 (2000): Preclusion policy rationales.
Burrell v. Armijo, 456 F.3d 1159 (10th Cir. 2006) (concurring); Kirby v. OCWEN Loan Servicing, LLC, 641 F. App’x 808 (10th Cir. 2016); Banks v. Opat, 814 F. App’x 325 (10th Cir. 2020): Courts may raise preclusion sua sponte.
Boulter v. Noble Energy Inc., 74 F.4th 1285 (10th Cir. 2023): Jurisdictional dismissals preclude re-litigation of the jurisdictional question; time-of-filing rule echoed in a 2024 unpublished decision.
Antero Resources Corp. v. Airport Land Partners, Ltd., 526 P.3d 204 (Colo. 2023): Context for exhaustion disputes before the Commission; relied on by Royalty Owners for futility, but preclusion barred re-argument here.
Wright & Miller, Federal Practice & Procedure § 3731: Treatise support for the same-case requirement for “other paper.”

III. Legal Reasoning on Collateral Estoppel and Administrative Exhaustion

The district court dismissed under issue preclusion (collateral estoppel), and the Tenth Circuit affirmed. Two prior Colorado state cases between these same parties had been dismissed for failure to exhaust administrative remedies with the Commission. Royalty Owners did not appeal those dismissals and refiled instead.

Key holdings:

Preclusion applied to the jurisdictional issue: Even though the prior courts did not reach the merits, their determinations that jurisdiction was lacking due to non-exhaustion precluded re-litigation of that threshold jurisdictional question (Boulter).
Futility arguments were also precluded: The prior state courts had already rejected futility. Royalty Owners could not repackage their futility theory post-Airport Land in the third iteration.
No waiver of the defense: Extraction pled issue preclusion in its federal answer to the third amended complaint. Defendants may amend pleadings to add affirmative defenses when a new complaint is filed, and courts may raise preclusion sua sponte in appropriate cases.

Standard of review: The court reviewed the judgment on the pleadings de novo under the Rule 12(b)(6) standard, accepting well-pleaded facts as true and asking whether plaintiffs could possibly state a claim in light of preclusion.

Finality: Although the dismissal was without prejudice (typical for jurisdictional defects), it was final and appealable because the defect—failure to exhaust—could not be cured by mere amendment of the complaint.

Sanctions warning: The district court declined to dismiss with prejudice but warned that a fourth filing without exhaustion could justify dismissal with prejudice as a sanction for litigation misconduct. The Tenth Circuit left that warning undisturbed.

Impact

A. Removal Practice Under CAFA and § 1446(b)(3)

New Tenth Circuit clarification: “Other paper” is limited to filings generated in the case being removed. External filings—including bankruptcy proofs of claim and documents from related or earlier state actions—do not trigger the 30-day clock.
Practical effect: Defendants may legitimately wait for in-case discovery or other in-case filings to quantify the amount in controversy before removing. Plaintiffs who want to accelerate or foreclose removal must provide clear and unequivocal notice of removability within the case itself.
Procedural rigor: Timeliness challenges must be timely raised in the opening remand motion. Arguments first raised in reply risk being disregarded and thus waived.
Participation in state court: Defendants do not waive removal merely by litigating before removability becomes clear in the case; waiver requires adequate notice plus clear submission to state jurisdiction thereafter.

B. Preclusion and Administrative Exhaustion in Oil-and-Gas Royalty Litigation

Preclusion of jurisdictional questions: Unappealed state-court dismissals for failure to exhaust will bind the parties and prevent re-litigation of exhaustion (and futility) in later actions arising from the same dispute.
Strategic takeaway: Parties must promptly appeal adverse jurisdictional rulings on exhaustion rather than refile to avoid preclusion. Serial refiling may draw sanctions.
Commission’s role: The opinion does not decide the substantive scope of the Commission’s jurisdiction (e.g., the statutory carve-out for pure contract interpretation under Colo. Rev. Stat. § 34-60-118.5(5.5)). For these parties, that boundary question is effectively off the table due to preclusion.

C. Appellate and Motion Practice

Record on appeal: Efforts to supplement the record with materials not presented to the district court face a high bar and will be denied absent a compelling need to reflect what truly occurred below.
Rule 28(j) candor: Supplemental authorities must be presented with full candor about their legal significance. Misleading or incomplete submissions may invite sanctions.

Complex Concepts Simplified

CAFA Removal: A federal path for class actions when minimal diversity exists, the class is at least 100 members, and more than $5 million is at stake.
“Other Paper” (28 U.S.C. § 1446(b)(3)): A document filed in the same case (e.g., amended pleading, motion, order, discovery response) that first makes removability clear. It does not include filings in other courts or separate cases.
“Clear and Unequivocal Notice”: The removal clock starts only when the plaintiff’s in-case paper unmistakably reveals federal removability (e.g., the amount in controversy crosses the statutory threshold).
Jurisdictional vs. Procedural Defects: Subject-matter jurisdiction can never be waived. Procedural requirements for removal, like timeliness, can be waived if not properly asserted.
Issue Preclusion (Collateral Estoppel): Bars re-litigation of an issue that was actually decided in a prior action and essential to the judgment—even if the prior dismissal was for lack of jurisdiction (as to that jurisdictional issue).
Exhaustion of Administrative Remedies: Some disputes must be taken to an agency first; courts lack jurisdiction until the party exhausts those remedies, absent a recognized exception (e.g., futility). Prior rulings on exhaustion can be preclusive.
Noscitur a Sociis: A canon of construction meaning a word is known by the company it keeps; used here to limit “other paper” by reference to neighboring terms—“amended pleading, motion, [and] order.”
Forfeiture vs. Waiver: Forfeiture is failing to timely raise an argument; waiver is the intentional relinquishment of a right. Arguments not raised below and not argued as plain error on appeal are typically deemed waived.

Conclusion

This opinion sets a clear and practical rule for removal practice in the Tenth Circuit: only filings generated within the case to be removed can trigger § 1446(b)(3)’s 30-day clock. Parties cannot bootstrap external filings—such as bankruptcy proofs of claim or papers from earlier, related state cases—into “other paper.” The court also reinforces that timeliness is a waivable procedural requirement and that district courts may disregard arguments first raised in reply.

On preclusion, the court confirms that prior unappealed state-court dismissals for failure to exhaust administrative remedies preclude later attempts to re-litigate exhaustion and futility. For oil-and-gas royalty disputes in Colorado, this means parties must promptly test exhaustion rulings on appeal rather than refile. The opinion underscores the judiciary’s interest in finality, efficiency, and candor—warning of potential sanctions for serial refiling without curing defects and for incomplete Rule 28(j) submissions.

Taken together, the decision provides crisp guidance on CAFA removal timing, fortifies the preclusive effect of jurisdictional dismissals, and offers a roadmap for disciplined motion and appellate practice in complex, multi-forum litigation.